Outsourcing on projects isn’t without issues, whether you’re outsourcing part of the project delivery or managing a project to put in place a process to outsource something for the company such as a shared service centre.
Here are 5 issues that you might face when outsourcing and what you can do to mitigate them.
1. Partner Is Not Creative
According to Deloitte’s 2016 Global Outsourcing Survey, 35% of respondents are already focused on measuring the value of innovation in the partnerships they have with outsourcing firms.
That means 65% of people are not.
Creative thinking and innovation can help solve problems with capacity, give you global scalability and provide access to assets that you wouldn’t have otherwise. Innovation can look different to different organisations but you could leverage your outsourcing partner to:
Manage the issue: Talk about it. Have you specifically asked your outsourcing partner to think creatively? Make it part of your conversations with them. Ask how they are support innovation, and then work with them to help them deliver it. Otherwise they may be following what they consider is good-enough levels of service delivery. Be explicit about what you are expecting and what you would like.
2. Quality of Service Is Poor
One of the biggest concerns with outsourcing is that once the initial honeymoon period is over, the results will be…mediocre. And this can happen.
Manage the issue: Training. Set your expectations and offer training to help your partner meet them: it’s in both your interests.
You can also escalate the issue to the vendor management team, starting with your account manager. No one wants their company to be thought of as mediocre. Sometimes suppliers don’t know that you rate them in that way. Other times you need to accept that you aren’t a big enough customer, or you don’t pay for a higher quality service, for them to offer you anything more than they already do, which might be what they are contracted to do.
You can renegotiate the deal if it’s the arrangement that’s at fault (and your expectations) rather than the fact that they aren’t meeting the basic terms of the agreement.
3. Reactive Approach To The Service
You outsourced because you wanted someone to be totally on it, in a way that you couldn’t be for whatever reason. Unfortunately, what you’ve got is a partner that is reactive. They deal with things, but there isn’t any preventative work or proactivity. You aren’t seeing any additional benefits from the arrangement.
Manage the issue: This could be because the overall governance is poor. You can put in place more levels of communication or knowledge sharing or governance to ensure that there’s the framework for proactivity and they have the access to the people and processes they need to be able to work in a proactive way. You could also look at changing the metrics for measuring success of the agreement. If they are tasked on resolving service desk tickets in 4 hours, for example, they might not be compensated for reducing service desk tickets by x%. If you want proactivity, you might be better off incentivising for that.
4. Unskilled (Or Poorly Skilled) Resources
One of the reasons people outsource, especially on projects, is to quickly get access to skills that you don’t have in house. The people you met during the vendor procurement process certainly showed you that they knew what they were talking about.
But when you are into the project proper, the resources you find yourself working with daily might not be as good as those that you met at the beginning. And then there comes a point where you think that they really aren’t the right people to offer you what you were hoping for in terms of a skilled resource base.
Manage the issue: Additional training might help when the problem is specifically to do with your processes, but it isn’t much help if you are facing a partner project manager, for example, who doesn’t seem to know a Gantt chart from a RACI matrix. I’d be to say that it isn’t your job to train their staff in non-company specific skills like project management, business analysis, team leadership and so on.
Either ask your account manager to sort out the problems of competency or ask for the poorly skilled resources to be removed from your account. You should be able to do this under the terms of your contract – check first, and if you don’t have this kind of clause in your contract you should negotiate to get it in.
5. Partner Does Not Communicate
Communication can be something that falls through the cracks. When things get busy on projects, often (and wrongly) communication is the thing that suffers most drastically, most quickly. Everyone is off doing what they think needs to be done and those regular supplier/customer meetings get shortened or postponed or just cancelled.
Manage the issue: Better communication might start with you. Are you able to spend more time on it from your side? Can you make the right people available, or set better expectations about what you want to hear about and how? Collaboration tools or shared software might help, or even simple things like making sure people have direct contact details for each other.
If you’ve done all this and the communication you have in place is still not adequate for you, then you need to escalate this to the vendor management.
Have you hit any other problems managing your outsourcing arrangements? Let us know in the comments below.
In this video I talk about the 5 project costs you might have forgotten to account for in your budget.
For more details, this article has more about the costs you might have overlooked.
This month we’re talking about all things outsourcing and there’s nothing more important than communication when it comes to making an outsourcing partnership work.
More specifically, there’s nothing more important than trusted communication. People can be sceptical about outsourcing arrangements and if you want the partnership to really work it has to be built on trust.
In other words, you want them to believe the information that is in your status reports and other comms and to take what you say at face value. They should trust you to report the right things and they should trust the content in the report itself to be truly representative of the project today.
Here’s how to make your project communications trustworthy, and it’s easier than you might think!
First, there should be no surprises for your sponsor.
Whether you are working for a client or internally, reports aren’t the best way to find out about major project problems. There are other ways that you can do that. You should put big problems in your reports but only once you have cleared them through other communication routes.
Share The Reports With The Team
You should send your reports to your team members as well. I mention that because I know not everyone does it by default. Sometimes reports only go to stakeholders, clients, users, customers but not the people who are doing the job.
The fastest way to build trust between you and the team is to not drop them in it. You don’t want your reports to be full of blame and things that come as a surprise to them. This isn’t the way that they should find out about changes or schedule amendments. You have other routes open to you to inform them about those, although of course they should be mentioned in your reports once everyone knows about them.
Mostly we think of formal project reporting and communication as something we do to people outside the project team. But you have to have your team on side. They are ambassadors for your project and they need to be talking about it and promoting the benefits of your project with the people they work with and meet.
They will provide you with updates for your standard communications but they’ve got to understand current status and be able to field questions from your users or their colleagues as well, and they can do that better through understanding the big picture, whether they are on the outsourcing side or the customer side.
Stay on Message
Everyone hears the same version of the story, whatever their position. It undermines your communication efforts if different stakeholders are receiving different versions of the truth.
Staying on message limits the impact of your message being changed as people share it with their colleagues. It’s also surprisingly easy for a team member to undermine your efforts about talking positively about your project, even if they don’t mean to, with a few off-hand remarks.
Finally on this, you’ll be more trusted as an individual if your team feels that you are representing their work properly in your reports, and they’ll believe that you are sharing everything with them if the reports are a transparent reflection of the work. If they see – whether they are a colleague or part of the management team – things in there that they weren’t expecting then they could start to feel that you are hiding things or simply that you aren’t on top of it all.
The Benefits of Trustworthy Reporting
The main benefit to come out of being trustworthy when communicating about your project is simply that people trust you. This is huge in project management and leadership because someone with good credibility who is trustworthy will find it much easier to get work done through other people. Your reputation counts for a lot.
You’ll also save time because you’ll believe what they are telling you and you won’t have to go routing around for a different version of the truth, or spend too much time trying to put what they’ve told you in a way that’s acceptable to the stakeholders.
When people feel confident that they can give you the truth about a problem and you aren’t going to turn that against them, then you’ll find it easier to make your reports accurate because they’ll tell you the truth from their side too.
Outsourcing relationships can work and be hugely successful (and I’ve seen some of those in action) but you need great communications based on trust and teamwork to really get the benefits of why you outsourced in the first place.
In this video I talk about the option of PM knowledge repositories that can support your training efforts as a PMO. And they are cost-effective if you have a lot of people to upskill or support at a time.
5 Tasks For Benefits Identification
Last month I looked at the 5 questions to ask during benefits identification, based on information from the latest PMI Pulse report into benefits realisation.
This month I want to look at what happens next. You’ve asked those questions and got some vague but helpful answers. How do you turn them into concrete documentation that explains the project’s benefits to everyone concerned?
Luckily, the Pulse report has the answers in the form of 5 activities to do which help you define your benefits.
I’ve listed them below, along with my interpretation of what this means and how you could potentially incorporate the tasks into your project plan.
1. Defining the objectives and critical success factors
This is the same as you would do for any project, so I don’t think that you’ll need any special help here. You should set the objectives for your project and make sure that you understand how success will be measured in the eyes of the stakeholders.
Schedule the work: Set up some workshops with the right people to ensure that everyone is on the same page about the project vision. Document it and refer to it often.
2. Recognising and quantifying business benefits
In 40% of projects, the Pulse report states that this responsibility falls to the functional area VP or Director who could realistically be acting as the sponsor. Now you know the overall objectives for the project you need to think about how these translate into benefits for the organisation. You also need to know how they are going to be measured, or in what way you could assess whether you have actually achieved the stated benefits.
Schedule the work: Talk to the person or group responsible for the identification of benefits and get their views on what these should be. Start a conversation with your team about how you could build in deliverables that make benefits tracking easier.
3. Developing meaningful metrics and key performance indicators to measure the actual delivery of benefits and planned benefits
Turn those measures into a dashboard or concrete, measurable output that means something to the team and the people who are looking at it.
Schedule the work: Create a work package or work breakdown structure entry that reflects the work you have to do in order to build a mechanism for developing the metric. This could be as easy as creating new report, or it might take a lot longer and a lot more thought. Make sure you know who will be using this report (or whatever) so that you can get them to test it, and schedule in the testing activity too.
Remember that in order to see and measure a change in result, you have to have a baseline. That will probably involve doing measurement of the current state of affairs e.g. cycle time, to see if it changes in line with your expectation for benefits once the project has completed.
4. Establishing processes for measuring progress against benefits plan
You’ve got your baseline and your way of tracking, but when are you going to see those benefits and how much are you expecting at any one time? You can also think about when you are going to stop measuring the benefits – for example, you could take the benefit in this financial year and then not track it next year, considering it a business-as-usual situation by then.
Define a process – weekly, monthly? As part of that, cover off who is going to be the process owner and who is doing the work.
Schedule the work: Make sure that you have clarity about who is going to do the measuring. If it’s your project team, add time and tasks to their workload to allow for this, along with a plan for how you are going to hand this over to someone else once the project completes.
You’ll need a benefits plan to track against, so write or get one of those.
5. Creating a communications plan necessary to record progress and report to stakeholders
I don’t think it is worth having a separate plan for this as you could find that some of your comms activities are then in conflict. It’s definitely worth including benefits messaging in your normal project comms work too, so that a much wider audience gets to hear about all the great results that your project is getting.
Schedule the work: Put benefits identification and realisation communication tasks in your normal communications plan.
Hopefully this gives you some idea of the kind of work that goes into identifying benefits. It’s not rocket science but it can be time-consuming, especially if you haven’t had much experience as a company of thinking in a benefits-led way before.
Take the time and do it right, and you’ll get much better project results overall!
Read the whole report here: http://www.pmi.org/learning/pulse.aspx